Infographic: How the note ban has disrupted e-tailers' sales

However, company's move to de-prioritise several products paid off as profit more than trebled in FY16 priyanka • NowRasul Bailay | ET Bureau | December 06, 2016, 10:18 IST

E-commerce companies’ cash-on-delivery (COD) option was immediately impacted after November 8 when India announced scrapping of old high-denomination notes and replaced them with Rs 2,000 and Rs 500 bills to crack down on black money.

Shopclues.com, e-commerce company that focuses on consumers in tier 2-3 cities, said even though the chunk of its traffic from core buyers in smaller towns is back to normal three weeks after the demonetisation drive, customers are still wary of purchasing expensive items such as mobile phones, household electronics, etc.

“Our conversion came down as even if people were coming online, they were taking time and browsing,” said Radhika Aggarwal, co-founder of the Gurgaon-based online retailer. “People would buy socks but they may not buy shoes worth Rs 3,000 yet. Consumers are still not buying an iPhone 7 because they would rather wait for a couple of weeks to a month to see how things shape up.”

“We got a call to figure out what to do with orders that are already out on COD the day demonetisation was announced,” she said.

As a first reaction to the retrieval of high-value currencies, ecommerce companies including Flipkart, Amazon and Snapdeal stopped taking cash on delivery orders.

“People were standing in queues, and shopping was not on top of their minds,” Aggarwal said even as she reiterated that the measure will have limited impact on ecommerce sales in the months ahead.

“This is a temporary disruption,” she said in an interview in Gurgaon on Thursday.

She said sales of high-value items such as mobile phones have still not picked up due to the negative sentiment arising out of demonetisation. “High average selling price products are still lacking demand,” she said.

As sales dip by almost half post demonetisation, ecommerce companies have started offering heavy discounts on products to shore up their businesses.

Snapdeal is currently offering up to 50% discount on a host of items including mobile phones, television sets and laptops among other electronic products and up to 70% on various home furnishing items.